One of my clients has received a cheque from an insurance company in settlement of a repair caused by a third party. I am a little unsure how to treat this. Should I treat it all as income, offset it against expenses on car repairs, or both given what I say below?
The repair bill is £280 and the settlement was £360 to cover my clients time in gettng the vehicle to and from the garage, some 20 miles away.
I am inclined to go for the third option but would welcome comments.
I would go with your 3rd option. Net £280 against car repair expense and show the balance of £80 as miscellaneous income.
At the end of the day how you show it doesnt really matter as the end result is that the bottom line profit will be £360 higer (or the loss £260 lower).
